Abacus Group Ltd (ASX: ABG) shares are back trading higher today after the company responded to market speculation.

The Abacus share price was paused in early morning trade while investors waited for a response from the property group.

Trading has since resumed, with the stock up 2.5% to $1.02 at the time of writing.

Even after today’s bounce, it has still been a difficult year for shareholders. Abacus shares are down around 15% in 2026.

Let’s take a closer look at what happened.

Abacus responds to media reports

The move follows an article in The Australian, which reported Abacus Group was set to sell its $300 million-plus stake in Abacus Storage King.

According to the report, Morgan Stanley had been working on a plan to sell down Abacus Group’s almost 20% stake in the listed storage group.

The Australian said billionaire Nathan Kirsh was expected to acquire half of the stake, while the rest would be placed with institutional investors.

Kirsh is already a major player in Abacus Storage King, with the report saying he owns about 40% of the stock directly.

A sale would have marked another big step in the separation between Abacus Group and Abacus Storage King.

But Abacus has now cooled some of that speculation.

In its ASX release today, Abacus said the “Morgan Stanley transaction has not proceeded”.

It also said there were no discussions with Charter Hall Group (ASX: CHC).

The company added that it regularly reviews strategic opportunities and would update the market in line with its disclosure obligations.

What investors are weighing up

The interest makes sense, given Abacus has been going through a major reshaping.

Abacus Storage King was split out from Abacus Group in 2023, creating two separate ASX-listed groups.

More recently, Abacus Group brought the management of Abacus Storage King in-house.

The Australian said this left Abacus with a smaller and cleaner structure, including office assets worth about $1.5 billion and two retail properties worth about $419 million.

The report also said proceeds from any stake sale had been expected to reduce debt, potentially lowering gearing from 34% to somewhere in the 15% to 20% range.

Still with the stock still under pressure, shareholders are looking for anything that could unlock value. A cleaner structure or lower debt load would give the market something new to work with.

It can also raise the possibility of capital management, asset sales, or a broader corporate move.

Charter Hall speculation adds another angle

Charter Hall is the other name sitting in the background.

The Australian reported Charter Hall has been steadily building its position in Abacus Group, with its stake now above 5.8%.

The report said this has brought up questions about whether Charter Hall could eventually make a move on the company.

Abacus has pushed back on that part of the speculation, saying there are no discussions with Charter Hall.

The post This ASX property stock is rising after takeover speculation heats up appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in James Hardie Industries Plc (ASX: JHX) fell earlier this week when the company reported its full year results, and on the face of it it’s not hard to see why.

While net sales came in at US$4.84 billion, net profit attributable to shareholders was down 75% to US$104 million.

However, the analyst teams at Macqaurie and Morgans have had a closer look at the results, and like what they see.

We’ll get to what they are saying later. Firstly let’s have a closer look at the James Hardie result.

Underlying results solid

Chief Executive Aaron Erter made the point that the company exceeded expectations in terms of underlying earnings.

As he said:

We delivered Adjusted EBITDA above our guidance range in the fourth quarter, reflecting disciplined execution and the strength of our business model in a challenging operating environment. Despite unfavourable weather in February and early March that impacted reported results and disrupted construction activity across key regions, the business delivered underlying performance that exceeded expectations.

Mr Erter said it was a transformational year for the company, including as it did the finalisation of the acquisition of AZEK.

He said the company was continuing to see progress in terms of cost and commercial synergies from that deal, “further strengthening our belief in the long-term value creation opportunity from the combination”.

He added that the company was forecasting another step up in earnings this year.

We also expect a meaningful step-up in Free Cash Flow to greater than $500 million in FY27. This will be driven by higher Adjusted EBITDA as we realize both cost and commercial synergies, a reduction in one-time integration and transaction-related costs, and continued discipline around capital spending and working capital. As these factors come together, cash conversion will improve, giving us greater flexibility to reduce leverage over time.

Shares looking like good value

The analyst team at Macquarie said the company’s results beat expectations at an EBITDA level, and James Hardie’s cost and operational execution was “solid”.

Macquarie said James Hardie was expecting soft, but stabilising conditions in the US which was a negative, and downgraded their price target on the company from $41.10 to $39.60, still well above the current price of $28.43.

The team at Morgans has a price target on James Hardie shares of $39, reduced from $45.75 following the results announcement.

They note that while there is persistent softness across key markets, the company is fundamentally sound.

They said:

We continue to view JHX as the highest-quality building products exposure on the ASX with structural advantages in fibre cement and an enhanced footprint in exteriors through AZEK. FY27 should mark an inflection year as organic growth returns, pricing holds, synergies accelerate and leverage normalises. At the current valuation, JHX screens attractively relative to quality and medium-term growth.

The post How high could James Hardie shares go? Brokers have their say appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Virgin Australia Holdings Ltd (ASX: VGN) shares are rocketing higher in Thursday lunchtime trade. At the time of writing, the airline’s shares are up 8.22% and changing hands for $2.44 a piece.

Today’s jump has helped recover some of the losses the stock has shed over the past month, but the share price is still down 30% for the year to date and 25% lower than when the company launched on the ASX in late June last year.

What is driving the airline’s shares higher today?

There isn’t any price-sensitive news out of Virgin Australia today to explain the current share price surge.

However, investors could be flocking to the ASX airline share following an announcement out of Webjet Group Ltd (ASX: WJL) yesterday.

The company announced a change to its commercial agreements with Virgin Australia ahead of the ASX open on Wednesday. 

Webjet said its Webjet Marketing subsidiary has been receiving commission payments from Virgin Australia Airlines and Virgin Australia International Airlines relating to the sale of Virgin flights and ancillaries, along with specified performance targets.

But the online travel agency said that Virgin Australia has told Webjet it will substantially reduce its commission streams and commercial arrangements from the 1st of July 2026.

A turnaround in sentiment could also be supporting Virgin Australia’s share price increase today. Investors are reacting positively to resilient travel demand and stabilising fuel costs. 

There is growing optimism around an imminent peace agreement between the US and Iran, which would help jet fuel supply.

The company also recently confirmed its FY26 guidance, which has helped gather more confidence from investors.

In April, Virgin Australia said its FY26 financial guidance is unchanged. Despite fuel prices almost doubling, the airline said it still expects its underlying EBIT to improve in the second half of FY26.

The airline’s fuel costs are expected to be around $30 million to $40 million above its earlier forecasts. But it has strong hedging (92% of its Brent crude and 71% of refining margin exposure is hedged for the remainder of FY26), which means the group is protected against most price rises. 

Virgin Australia shares have been under pressure this year

The sentiment shift comes on the back of several headwinds facing the airline over the past couple of months.

Ongoing conflict in the Middle East severely restricted the supply of jet fuel (which is derived from refined crude oil). 

The airline has previously raised its domestic airfares in response to rising jet fuel costs in an effort to maintain or even boost revenue. But investors were still concerned about the airline’s operating costs and profits, and many turned their backs on the shares.

Can Virgin Australia shares keep climbing?

Analysts are very bullish about the outlook for the ASX travel stock over the next 12 months.

TradingView data shows that all eight analysts have a buy consensus on the shares. The average $3.59 target price implies a potential 47% upside ahead, at the time of writing. But others think Virgin Australia’s shares have the potential to fly another 70% higher to $4.15.

The post Why are Virgin Australia shares booming 8% higher today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If I told you there was an ASX dividend stock on our market right now that trades with a fully-franked dividend yield close to 4% and has grown its dividends per share by an average of 27% per annum over the past five years, you might not even believe it.

That combination is a rare occurrence on the ASX. Most blue-chip ASX stocks only tend to grow their dividends at single-digit rates at best.

But that is indeed the case with MFF Capital Investments Ltd (ASX: MFF). So let’s dive into whether this is a dividend stock worth buying today.

MFF Capital Investments is a listed investment company (LIC). That means it is a company that owns and manages an underlying portfolio of investments on behalf of its shareholders. In MFF’s case, this company tends to own a concentrated portfolio of US stocks, selected in a manner that mirrors Warren Buffett’s classic investing style. Buffett is famous for his long-term investing approach: buying shares of high-quality companies at prices that make sense and holding them for long periods. Sometimes indefinitely.

Some of the stocks that have been part of MFF’s portfolio for many years include Alphabet, American Express, Amazon, Mastercard, Visa, and Bank of America.

But let’s talk dividends.

An exceptional ASX dividend stock?

As we’ve already touched on, MFF is an enthusiastic dividend payer. The company has delivered an annual dividend increase every single year since 2018. That year saw the company fork out an annual total of 3 cents per share in dividends. By 2021, that had grown to 6.5 cents per share. By 2023, MFF was up to 9.5 cents per share, and hit 17 cents per share last year.

MFF has already paid its 2026 interim dividend, which was worth 10 cents per share. The company has told investors to expect a final dividend of 11 cents per share later this year. If MFF does hit 21 cents per share in 2026 dividends, it will mean it has grown its dividends by a compounded average growth rate of 27% per annum since 2021. All payouts came with full franking credits attached, too.

Most companies that sport those kinds of dividend growth rates trade on very low yields. However, MFF shares are currently (at the time of writing) on a trailing dividend yield of 3.86% and a forward yield of 4.28%.

Let’s assume, for a moment, that MFF keeps up its blistering dividend growth rate over the next five years (which is by no means assured). If that’s the case, investors could receive a substantial upfront yield with a purchase today and would still see their dividend cash flow double in under five years. An alluring prospect.

The post This ASX dividend stock has a 4% yield and a 27% growth rate appeared first on The Motley Fool Australia.

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Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, American Express, Mastercard, Mff Capital Investments, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, American Express, Mastercard, and Visa. The Motley Fool Australia has recommended Alphabet, Amazon, Mastercard, Mff Capital Investments, and Visa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Zip Co Ltd (ASX: ZIP) shares are leaping higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock closed yesterday trading for $2.20. In late morning trade on Thursday, shares are changing hands for $2.29 apiece, up 4.1%.

For some context, the ASX 200 is up 1.5% amid renewed Middle East peace hopes spurred by United States President Donald Trump.

Here’s why Zip is racing ahead of the benchmark’s gains today.

Zip shares leap on Australian branding news

As you may know, on 13 May, Zip reported that the High Court of Australia ruled against it in a judgement involving privately owned, non-bank financial institution, Firstmac Limited.

Firstmac lodged the proceeding against Zip, noting that it had a trademark for the financial services term dating back to 2004.

Zip shares closed down 0.8% on the day, with the court ruling the company had to stop calling itself Zip in Australia. Although the ruling didn’t affect the company’s United States and New Zealand businesses, branding changes can lead to short-term costs and other headwinds for any stock.

Today, investors are bidding up Zip shares after the ASX 200 BNPL stock announced that it had reached an undisclosed settlement with Firstmac. This means Zip will still be called Zip in Australia.

Management noted that the settlement with Firstmac will not have any significant impact on its FY 2026 guidance.

According to the company:

While the terms of the settlement agreement are otherwise confidential, Zip has no further liability for damages or costs in relation to Firstmac’s proceedings and Zip confirms that the amount payable under this settlement is not material to the Zip Group and does not affect Zip’s FY26 guidance.

What’s the latest from the ASX 200 BNPL stock?

Aside from its recent, and now resolved Australian branding issues, Zip shares last made headlines on 7 May after the company presented at the annual Macquarie Group Ltd (ASX: MQG) Conference.

Highlights included news of strong, ongoing growth in April.

In its key US growth market, the ASX 200 BNPL stock reported a year-on-year total transaction volume (TTV) increase in April of more than 40% (in US dollar terms).

Management also used the occasion to reaffirm Zip’s full-year FY 2026 guidance.

The company expects to deliver full-year cash earnings before taxes, depreciation and amortisation (EBTDA) of $260 million. That will be driven by expectations of 40% or more TTV growth in the US (in US dollar terms).

Zip forecasts a full-year operating margin of 18% and a revenue margin of 8%.

The post Buying Zip shares? Here’s why the ASX BNPL stock is rocketing higher today appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

GR Engineering Services Ltd (ASX: GNG) shares are pushing higher on Thursday after the engineering group locked in a major new contract.

At the time of writing, the GR Engineering share price is up 4.15% to $5.02. By comparison, the S&P/ASX All Ords Index (ASX: XAO) is 1.70% higher to 8,862 points.

It has already been a strong year for shareholders, with the GR Engineering stock up around 12% in 2026.

When looking further out, the gain is closer to 75% over the past 12 months.

Here’s what investors are looking at today.

A $229 million deal is now locked in

According to the release, GR Engineering has executed an EPC contract with Genesis Minerals (Leonora) Pty Ltd, a wholly owned subsidiary of Genesis Minerals Ltd (ASX: GMD).

The $229 million contract relates to the Tower Hill Gold Project in Western Australia. EPC stands for engineering, procurement and construction, which means GR Engineering will help take the project from design through to construction.

GR Engineering was appointed the preferred contractor in February, so the award was already on the market’s radar.

The company did not provide an earnings upgrade with the update. But a $229 million contract is still significant for a company with a market capitalisation of about $845 million.

Why the deal adds confidence

New project awards are a key driver for GR Engineering because its work is tied closely to the resources sector.

The company provides engineering, design, construction, operations, maintenance, and advisory services. When miners approve new projects or expand existing sites, GR Engineering can pick up the work attached to that spending.

Managing Director Tony Patrizi said the company has a long track record of delivery in Australia’s minerals sector.

He said GR Engineering looks forward to continuing its work with Genesis at Tower Hill.

Can the share price run continue?

Today’s gain adds to a strong run for GR Engineering shares, which are now trading near the top of their 52-week range of $2.76 to $5.28.

The stock also has a dividend yield of about 4.8%, which may help explain some of the interest from income-focused investors.

The contract win gives GR Engineering another sizeable project and adds more visibility to its work pipeline.

But with the stock up 75% over the past year, expectations are higher now.

From here, attention will turn to project margins, delivery costs, and whether more contract wins can keep the run going.

The post Up 75% in a year, this ASX stock just landed a $229 million contract appeared first on The Motley Fool Australia.

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• Buying Zip shares? Here’s why the ASX BNPL stock is rocketing higher today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is climbing higher in Thursday lunchtime trade. At the time of writing, the index is up 1.28%, reversing its 1.3% loss on Wednesday.

The index has been supported by a positive night on Wall Street. A drop in oil prices has dragged down the energy index today, but elsewhere, most ASX sectors are gaining ground.

Here are two ASX 200 shares I think can drive the ASX 200 Index higher this year, with potential upside of over 100%. They look super cheap to me right now.

Cochlear Ltd (ASX: COH)

Cochlear shares are climbing higher on Thursday. At the time of writing, the shares are up 1.02% to $95.74 a piece. It’s a relief for investors after the medical device company suffered two brutal sell-offs in February and April this year.

The ASX healthcare company’s latest crash in April followed downgraded FY26 guidance. Cochlear cited weaker conditions across developed markets and softer demand. 

The guidance downgrade followed the ASX 200 company’s softer-than-expected half-year result earlier this year, and a sector-wide rotation away from ASX healthcare shares. 

But I think the shares are now oversold, and that there is potential for the company to rebound. 

Analysts seem to agree. Market Index data shows that brokers rate the stock as a buy and are tipping a potential 104% upside to $196.95, at the time of writing.

Resolute Mining Ltd (ASX: RSG)

Resolute Mining shares are jumping higher on Thursday. At the time of writing, the shares are up 3.11% to $1.23 a piece. The shares are now down just 1.5% year to date, but are 97% higher than this time last year.

As an ASX 200 gold stock, Resolute’s shares have benefited from an uptick in gold over the past year. 

And today’s uptick is likely for the same reason. Gold is trading above US$4,500 an ounce at the time of writing, after rising more than 1% in the previous session. 

According to Trading Economics, the increase is supported by growing optimism around an imminent peace agreement between the US and Iran. A deal could help to ease inflationary pressures and reduce concerns about further interest rate hikes. 

The miner also announced that it recently reached several impressive feasibility milestones and posted a significant increase in its gold production figures. 

The miner expects production to keep climbing this year, too, to around 250,000 to 275,000 ounces at an all-in sustaining cost of $2,000 to $2,200. 

Brokers are very bullish on the shares and have a strong buy rating. They tip a potential 102% upside to $2.46 a piece, at the time of writing.

The post 2 super-cheap ASX 200 shares tipped to bounce back appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear. The Motley Fool Australia has recommended Cochlear. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Catapult Sports Ltd (ASX: CAT) shares have been in fine form this week.

So much so, the ASX tech stock is up 23% since Tuesday’s close, including an 18% gain on Wednesday.

Is it too late to invest? Let’s see what Bell Potter is saying about the sports technology company.

What is the broker saying about this ASX tech stock?

Bell Potter was pleased with Catapult’s performance in FY 2026. It highlights that the company’s results were ahead of expectations for everything except its annualised contract value (ACV). It said:

FY26 management EBITDA – the key earnings metric – of US$24.7m was 8% above our forecast of US$23.0m and 10% above consensus of US$22.4m. Notably, the guidance was 50% growth and it came in at 67%. The beat was driven by a 2% beat at revenue (US$140.7m vs BPe US$137.9m) and a 90bp beat at the margin (17.6% vs BPe 16.7%).

ACV of US$133.8m was close to in line with our forecast of US$133.6m and consistent with the guidance of b/w US$133-134m. Free cash flow before transaction costs of US$6.6m was also ahead of our forecast of US$5.6m and the guidance of US$5-6m. Catapult almost achieved the Rule of 40 with a result of 36% which excludes the impact of the IMPECT and Perch acquisitions (46% including).

The broker also highlights that the ASX tech stock’s guidance for the year ahead was slightly ahead of expectations. This has seen Bell Potter lift its estimates slightly. It adds:

Catapult provided its usual guidance for the year ahead of strong ACV growth, continued improvement in margins, and higher free cash flow. We have upgraded our FY27 and FY28 management EBITDA forecasts by 6% and 3% which has mostly been driven by increases in our margin estimates. We have also upgraded our FY27 and FY28 ACV forecasts by 2% and 1% and this equates to ACV growth of 17% and 16% which is below the traditional 18-22% target but is obviously getting more difficult as the number gets larger. We now forecast free cash flow of US$10m in FY27 and US$14m in FY28 which is consistent with the guidance.

More upside to come

According to the note, the broker has retained its buy rating on the ASX tech stock with an improved price target of $4.65 (from $4.50).

Based on its current share price of $3.58, this implies potential upside of 30% for investors over the next 12 months.

Commenting on its buy recommendation, the broker said:

There is perhaps a lack of short term catalysts for the company but the stock does look reasonable value on an FY27 EV/EBITDA multiple of c.20x (based on management EBITDA) and we do expect another year of strong growth. The company also has a strong Balance Sheet with cash forecast to rise to c.US$60m at year end and so while we do not expect any acquisitions in the near term we do see potential for further M&A in the short to medium term.

The post Is this ASX tech stock a buy after rocketing 18% yesterday? appeared first on The Motley Fool Australia.

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Some of the best buying opportunities appear while the market is still unconvinced.

That is why I think Treasury Wine Estates Ltd (ASX: TWE) shares are worth a closer look today.

The ASX 200 share has been through a difficult period and is down almost 50% over the past 12 months. 

Consumer demand has been uneven, China has taken time to rebuild after wine tariffs were removed, and investors have become more cautious.

But I think that is exactly what makes the share interesting.

Treasury Wine does not need everything to look perfect today. It needs its best brands, distribution, and key markets to improve over time. If that happens, I think the current share price could look attractive in hindsight.

A global wine business with valuable brands

Treasury Wine is not just a volume wine producer.

Its strongest asset is its portfolio of premium and luxury brands, led by Penfolds. This gives the company exposure to a part of the wine market where brand, scarcity, reputation, and distribution can all support stronger margins.

That is what interests me.

Penfolds is one of the few Australian wine brands with genuine global recognition. It has a long history, a strong luxury position, and appeal across markets such as Australia, Asia, and the United States.

Premium wine can still be cyclical. Consumers and distributors can pull back when conditions are tougher. But I think strong luxury brands can recover well when confidence returns.

China could still be an important swing factor

One of the biggest moving parts for Treasury Wine is China.

The removal of tariffs on Australian wine was an important step, but rebuilding a market is not instant. Distribution, inventory, consumer demand, and brand momentum all take time to normalise.

I think investors may need patience here.

China does not have to return to its previous peak immediately for Treasury Wine to benefit. A gradual recovery in demand for Penfolds and other premium wines could still improve earnings and investor confidence over the next few years.

For me, this is a key reason the stock looks interesting before the turnaround is obvious.

Once the market has clear evidence that China is firing again, the share price may already have moved.

A portfolio with more than one lever

Treasury Wine also has exposure beyond China.

The company has been building its presence in the United States, including through premium wine assets and a broader focus on luxury and premiumisation.

That gives the business more than one way to grow.

I also like the fact that this is a company with tangible assets, established brands, global distribution, and a product category that has existed for centuries. It is not trying to invent demand from scratch.

The challenge is execution. Management needs to manage inventory carefully, protect brand equity, improve returns, and show that the portfolio can deliver better growth.

That may take time, but I think the ingredients are still there.

Foolish Takeaway

Treasury Wine is not a clean momentum story today.

Investor confidence is low, and the business still has work to do in key markets.

But that is the point of the opportunity. If Penfolds keeps its luxury position, China continues to rebuild, and the US business improves over time, Treasury Wine could look like a very different investment in a few years.

I would not expect a smooth ride. But for patient investors willing to weather potential volatility, this could be the kind of ASX 200 share worth buying before confidence returns.

The post Down 50%: Why this ASX 200 share could be a smart buy before confidence returns appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Telstra Group Ltd (ASX: TLS) shares have dipped further into the red on Thursday morning.

At the time of writing, the shares have slumped 0.36% to $5.47 a piece. The decline follows a 1% drop on Wednesday.

The telecoms provider’s shares have had a good rally so far in 2026, however. The shares are up 12% year to date and 17% higher than this time last year.

Many are questioning whether the shares are now cooling or if there is still an upside ahead.

So, should I invest $5k in Telstra shares before the end of the month?

Market Index data shows brokers still rate the telco’s shares as a buy, but they tip an average 3% downside to $5.33 over the next 12 months, at the time of writing. 

TradingView data shows a similar analyst view. Of 15 ratings, only 4 have a strong buy stance, and another 11 have a hold rating. They have an average target price of $5.26, which implies a 4% downside over the next 12 months.

Either way, it doesn’t look like we’ll continue to see the same level of gains in Telstra shares that we’ve seen recently.

In fact, if these forecasts are correct, investors who buy $5,000 of Telstra shares today could soon be looking at a loss.

Here’s why.

What’s the latest from Telstra shares?

It looks like after this year’s share price rally, analysts view Telstra shares as fully valued. Or even perhaps a little overvalued.

Analysts at Catapult Wealth also recently highlighted that while mobile price rises are expected to support Telstra’s revenue growth this year, there is uncertainty around spectrum license fees, which could remain a medium-term headwind for the company.

But upsides and potential target prices aren’t the only reasons investors should consider holding Telstra shares.

What about the telco’s passive income play?

Telstra is a dominant Australian telecommunications company. It owns and operates the nation’s largest mobile network and is a major fixed-line internet provider. And this makes it a classic passive income play.

The necessity of the internet and mobile phones means the company is well-positioned to perform well, regardless of the stage of the economic cycle or how the ASX is faring overall.

Telstra’s defensive nature also means it can pay shareholders a consistent, reliable passive income. 

The telco most recently paid its interim dividend of 10.5 cents per share, 90.48% franked, in March. The telco is forecast to pay a total dividend of 21 cents for FY26 (up from 19 cents in FY25). This translates to a forward dividend yield of around 3.9% excluding franking credits, at the time of writing. 

The post Should I invest $5,000 in Telstra shares before the end of May? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.